Big cars to cost more; duty hike on iron ore, steel

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New Delhi, Jun 13: to 62%, it attracted Rs 50 per mt duty.

The export duty on a range of steel products was also hiked. The tax on long products like bars and rods; angles, shapes and sections and wire has been increased from 10% to 15% . The government hopes this will improve their availability in the domestic market. Inflation, which has rose to a seven year high of 8.75% in end May according to official figures, has been fuelled to a large degree by higher prices of iron ore and steel products, whose prices have risen by over 50% since January. However, the government has exempted flat-rolled products of iron and steel, including galvanized products, and pipes and tubes from export duty. Till now, they attracted an ad valorem duty ranging from 5% to 15%. “There would be a relief because retail companies have been taking a hit and meeting their long term export commitment to that extent their will be a relief,” a domestic steel manufacturer said.

All duty changes come into force with immediate effect, the release said. Finance ministry sources told FE that the decision to hike the export duty and central excise duties was mainly a revenue mobilisation method. The CBEC expects to collect about Rs 2,500 crore from the higher duty on cars and iron ore this year.

“The hike will help us partly recoup the revenue loss on account of duty concessions given to petrol and diesel earlier this month,” a CBEC official said. The duty changes in the customs and excise duty on oil and petroleum products, as a part of the bail out package for oil companies, are expected to cause revenue losses of about Rs 22,660 crore this fiscal.

The official however added that the exemption from export duty to some of the iron products would set back tax collections by about Rs 200 crore this year. The department however decided to provide the relief after a number of representations from the industry.